Early Market Talk

Met with mixed and quiet trade as we turn the screens on this morning. At 0600 CH19 up a ¼ cent at $3.83 ½ on volume of 6K contracts. SH19 up $0.02 ½ at $9.24 with vol of 10.6K. KC and Chi wheat giving up some ground off $0.02 ¼ and $0.01 ¾ respectively.

Crude oil a buck and change higher at $49.11 supported in part by OPEC production cuts. Hedge Funds have cut their long positions in Brent Crude from 500 mln barrels the end of September to 152 mln barrels today. Dow futures near unchanged after sharp gains Friday. Those gains prompted in part by good jobs data and a Fed statement of being flexible on rates moving forward. Resumption of trade talks with China also supportive.

Trade delegation in China today and tomorrow for preliminary talks ahead of more senior negotiations next week. No other trade news over the weekend.

Last week saw soybeans gain $0.26 ¾ and have now clawed back near 70% of the 60 ½ cent break off the December 12th high. Corn gained 7 ¼ cents on the week nearing some overhead technical resistance.

USDA announced Friday that the January 11th crop report will be delayed. New date to be set once Gov’t funding is restored. Place your bets as to when you think that will be.

Slowing US ethanol production due to poor margins has current forecast of 5.6 billion bu of corn used in jeopardy. Lower corn use potentially offsetting a lower corn yield?

Weekend rains near expectations in Brazil favoring Mato Grosso, Goias, southern Minas Gerais, Sao Paulo, Parana, and Santa Catarina. Forecasted
rains this week favor northern Mato Grosso, southern Parana, Santa Catarina, and Rio Grande do Sul. Rains in southern areas will be helpful while drier weather in central and northeastern areas will increase production concerns.

Possible Brazil production off as much as 5 mmt from USDA 122 mmt Est?

Article Written by:

Bruce Nelson